Multinational Firms and the Theory of International Trade
Despite the great importance of multinational firms in international economics, theoretical and empirical research on these firms has generally been conducted separately from that on international trade. In this book, James Markusen provides a comprehensive integration of the two fields. Drawing on twenty years of research, he focuses on the interaction of scale economies, trade costs, factor endowments, and imperfect competition. He analyzes decisions about whether to build or acquire a foreign plant separately from decisions about where to raise the financing.
Markusen begins with the simplest possible partial equilibrium models and works systematically toward a full-fledged general equilibrium model with both horizontal and vertical foreign direct investment. He offers empirical tests of hypotheses derived from the theoretical models. The notation is unified throughout, distinctions between models are explained with thoroughly explained derivations, and numerous graphs support the analysis.
About the Author
James R. Markusen is the Stanford Calderwood Professor of Economics at the University of Colorado and an NBER Research Associate.
"The book will be of tremendous interest to professionals in the field..." —Civil Engineering
"Markusen has penned a dream book on multinationals for students and specialists alike. The questions are essential, the results rich, and the exposition exquisite."
—Donald R. Davis, Professor of Economics, Columbia University
Winner, Certificate of Excellence presented by the TIAA-CREF Institute, 2003